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Silver Letters to "The Powers That Be" On February 2nd, the precious metals world first heard the news from Ted Butler that Bill Murphy, the Chairman of GATA (The Gold Anti-Trust Action Committee), had thrown "the full weight of his organization behind ending the silver manipulation as a means of ending the gold manipulation." Having been a card carrying member of GATA for four years and a big fan of all of Ted's work, I was thrilled to hear it. Ted Butler's lonely voice in the wilderness teaming up with the "GATA army"...it sure works for me. All I can say (and I know I speak for thousands of others) is....welcome aboard Ted, we're all delighted you're here! For those of you not familiar with Ted's extensive work on the manipulation in the silver market, his web site is hyperlinked here. Since that announcement, Bill Murphy and Ted Butler have given the cry 'all hands to battle stations' as we have been asked to write letters and/or send e-mails to both New York Attorney General Eliot Spitzer and the Director of Market Oversight at the CFTC, Dr. Michael Gorham, to complain about the rigging of the silver price on the COMEX by 'eight or less' traders. To those who are not privy to Bill Murphy's website...LeMetropoleCafe, there have been hundreds if not thousands of letters and e-mails sent...many of which have appeared in Bill's daily MIDAS commentary. And just recently, Reg Howe has added new commentary on the goings-on in the silver market at the "CRIMEX" as he puts it. Howe says "Ted Butler has performed for the silver market much the same role that GATA has for gold." There can be no doubt now that the manipulation of the silver price by the '8 or less traders' is fully exposed for all to see. But unfortunately for their respective shareholders, the only group that does not appear to have a keen grasp of the obvious on this issue are the silver mining companies themselves. In my letter to Dr. Michael Gorham, I had this to say about it..."But the question begs to be asked: What happened to the fiduciary duties of the Executive and Board of Directors of these silver companies (on this particular issue) to the individuals who really own the company…us, the shareholders? Just asking." Posted below are three letters that I sent out (by both e-mail and 'snail mail'). Also, at the bottom of two of these letters, I have sent copies to others at the NYMEX and the CFTC to spread the news around...so to speak. I urge all of you to write/e-mail both of these gentlemen (with the appropriate cc's). My advice would also be to send copies to the top people at each silver company that you own shares in. Why should it be us shareholders fighting this fight by ourselves? That's what these guys (and girls) at our companies are hired/appointed to do...represent us, the shareholder. They all know what's going on out there, but just won't do anything about it. They are just hoping the whole issue will go away or blow up so they don't have to face 'the powers that be' themselves. So the more voices that join this effort, the more effective we will be. There is an incredible amount at stake in this fight…free markets, free enterprise and honest money...not to mention freedom itself. We cannot afford to let our guard down even for a few moments. Here are three paragraphs from my second letter to New York Attorney General Eliot Spitzer.... "Mr. Spitzer…there is a crime in progress at the NYMEX/COMEX that the CFTC absolutely refuses to do anything about. It’s my opinion (as stated in my attached letter to Dr. Gorham) that the CFTC is complicit." "The implications of this grotesque and malignant cancer at ground zero of the United States commodities market are beyond belief…and the ramifications of this manipulation of free market forces, once exposed, will reverberate at the highest levels of finance, economics and geo-politics." "Mr. Spitzer…I, and thousands of others, beg you to do what is right and end it." As I said before, I respectfully request that each and every one of you e-mail or write to these people and give them your opinion. Every opinion counts…and so does yours. Thank you.
04 February 2004 The Honorable Eliot
Spitzer Subject: The Silver Market Dear Sir: I am writing to you on an issue which, by now, you are more than familiar…the suppression of the silver price on the NYMEX/COMEX by the ‘eight or less’ traders. It is more than obvious, even to the casual observer, that the price of silver is controlled, and has been for more than a decade. Some people say that the price of silver has never been free, particularly since the appearance of the Silver Users Association in 1947. I know that your office…plus the authorities at the CFTC and the NYMEX/COMEX…are all more than aware of that as well. The 8 largest COMEX traders are net (naked) short more than 7 times the annual silver mine production of the US, the world's 4th largest producer (source - Silver Institute). You can be sure that the Chairman of the CFTC, James Newsome…an ex-cattleman… would never allow 8 traders to be short anything approaching total US cattle production, to say nothing of 7 times US cattle production. That the CFTC protects these silver shorts is deplorable. The CFTC has been informed of this issue many times over the last fifteen years, and have done nothing to stop it. Up until now, I have refused to believe that the CFTC is complicit in this matter, but I have now changed my mind to the belief that they are. In a related Dow Jones story today, I see that the SEC and NASD have both taken drastic action to tighten one of its rules governing illegal naked short selling. Let me quote this article... “Known as affirmative determination, the NASD rule stipulates that brokers and dealers engaged in a short sale transaction must make sure that shares can be delivered by settlement time, three days later.” "We closed a loophole," said Steve Luparello, executive vice president of Market Regulation at NASD. Until now, non-NASD members, like specialists, option markets and foreign brokers, weren't covered under the affirmative determination rule.” “New Rule 3370 goes into effect on February 20th, 2004. This new rule could become the Holy Grail for bulletin board traded companies. The Rule requires NASD member firms to treat non-member broker dealers as if they were regular customers as regards delivery of any shares that have been sold through a US registered broker/dealer.” ”A short seller
typically borrows stock from a broker to sell it into the market,
betting that the share price will fall so that he can buy the stock back
at a lower price and pocket Mr. Spizer, you and I and James Newsome all know that the ‘eight or less traders’ that are suppressing the silver price have little or no silver backing their obvious naked short positions. They are allowed to sell naked short any amount they wish, in order to control the price…without a word from the CFTC. This is not only illegal…it is outrageous as well…and entirely against regulations of the NYMEX/COMEX. It also makes a mockery of the belief that the U.S. markets are free and fair. This is obviously not the case with silver…plus a great many other things that are beyond the scope of this letter. If the SEC and the NASD have decided to put their foot down on naked short sales in this area, then it is long overdue that the CFTC take similar action in the silver market. Silver expert Ted Butler (www.butlerresearch.com/archive_free.html) has previously provided a fair solution (to the CFTC) that will fix any threat of a delivery default and eliminate the silver manipulation problem at the same time. In fact, it would work in all commodity markets. The CFTC must mandate that all longs in futures contracts must have the full cash value of their contracts deposited in their accounts by first delivery day. And likewise, all shorts must have COMEX warehouse receipts deposited by first delivery day. Mr. Spitzer, the CFTC is deathly afraid to even debate this, because they know it has great merit. You and I know it too. You and your department have done most excellent work in the past number of years bringing financial wrong-doings to light. I urge you to the honourable thing, and end this manipulation now. I know you have the power, and I also hope that you have the will to do what is necessary and right. In closing, I wish you well in your continued endeavors. I also enclose a copy of silver expert Ted Butler’s latest essay “Business as Usual?” taken from his web site mentioned above, or available directly from the URL (www.investmentrarities.com/02-02-04.html) If you have any further questions, or require more information, you can contact me directly, or speak with the expert on this issue…former commodities trader, Mr. Ted Butler. He is the real expert in these matters, and would gladly meet with you at your convenience and at a time and location of your choosing. Best personal wishes, Ed Steer emhs/mtf cc James
Newsome
Dr. Michael Gorham
Vincent Viola
Michael Steinhause
Christopher Bowen
Thomas LaSala, VP
File – four page letter…Eliot Spitzer 13 February 2004 Dr. Michael
Gorham Via: Registered Mail and E-mail Subject: The Silver Market – and the NYMEX/COMEX Dear Dr. Gorham, Before I get started on the real ‘meat’ of this letter, I want to thank you and the CFTC for allowing me (and other interested world citizens) the opportunity of commenting on the self-regulatory organization (SRO) structure of US licensed futures exchanges. I can’t speak for all the commodity markets you oversee, but frankly the CFTC does not pass any portion of the smell test when it comes to honesty in the silver market. The gold market is also manipulated…but this letter is mostly about the unethical and illegal goings-on in COMEX silver. The letter I sent to Eliot Spitzer…copy attached…is rather interesting. I sent a copy to you by e-mail shortly after I sent the ‘snail mail’ version to Mr. Spitzer. But I’m sending this copy by registered mail in case my e-mail to you (and others at the CFTC and the NYMEX/COMEX) got ‘lost’ somewhere in cyberspace. I’d appreciate it if you would be kind enough to glance through this letter because, like General George S. Patton, Jr., I’d rather not cover the same ground twice. In my letter to Mr. Spitzer I had one thing in particular to say about the CFTC, and it went as follows… “That the CFTC protects these silver shorts is deplorable. The CFTC has been informed of this issue many times over the last fifteen years, and have done nothing to stop it. Up until now, I have refused to believe that the CFTC is complicit in this matter, but I have now changed my mind to the belief that they are.” Dr. Gorham, it's Friday night, February 13th …tomorrow is Valentine’s Day. Right now I’m sitting in my family room working on my second double scotch of the night. I’ve just spent the last while looking over the carnage in my Registered Retirement Savings Plan (the Canadian version of the 401(k)) after ‘the boys’ went waltzing through the silver and gold markets today. Not a pretty sight. Now I’m writing this letter to you. You know, I’m not even going to ask you to look into the silver issue. That’s right. You know why…because you already know everything about it. That’s what your job is…to make sure that this manipulation of the silver (and gold) markets continues unabated and uninterrupted. That’s what you were hired to do by the ‘powers that be’, and you have fulfilled your mandate magnificently. The problem (as you and many others are more than aware) is that the COMEX is running out of physical silver with which to play this game…and first notice day for March delivery is coming up. I’d love to be a fly on the wall as you and “the powers that be” try to figure out what to do. I hope you have a game plan, because it’s going to be you and the rest of the top people at the CFTC and the NYMEX/COMEX who are going to be hung out to dry on this one. The types that hired you aren’t going to be around when everything goes sideways. I’m just curious to know if you (and others) have prepared yourselves to fall on your collective swords for “all the power and the money in the world” because that’s probably what you’re going to have to do. I see that Neal Wolkoff has left the COMEX…by “mutual agreement”. As you know, his contract wasn’t renewed…a smart guy getting out while he could. I’m surprised that many more of you haven’t followed his lead. Dr. Gorham, you and everyone else at the CFTC, the NYMEX and the COMEX are fully aware of what’s going on. This also goes for more and more people around the world who are flooding your office (and others) with e-mails letting you know that we…‘the great unwashed’…know what’s happening too. It takes huge gonads to do what is right considering the position that you are in. And, quite frankly, I don’t think you’re up to the task, as you were hired to perpetuate this fraud, not end it. I’m sure that if you tried, you’d end up like Jimmy Hoffa (or JFK) sooner or later…probably sooner. But in case you are up to it, why don’t you just take Ted Butler’s advice for the three things that have to be done to restore honesty and integrity to the commodities markets in general and the silver market in particular. Oh yes…gold…I just about forgot about that one. While you’re at it at Dr. Gorham…set that one right too. I’ve enclosed a copy of Ted’s letter on these ‘three little things’ as well. A little honesty in the commodity markets would be useful to both producer and consumer…and let’s not forget the economies of the (mostly) third world countries that produce them. Your bosses, in their attempts to destroy both silver and gold as monetary metals, and acquire all the U.S. government’s silver stockpile since the end of WWII, have now set themselves up for a catastrophe. Everyone that’s anyone in the precious metals world (investors both large and small…plus quite a few unfriendly governments) are now wise to what’s going on at the COMEX. I’m just guessing, but I would think that this situation might become a threat to national security at some point…and at the very least, financial Armageddon for some of the boys. A well known Harvard lawyer by the name of Reginald Howe had this to say about central banks in particular and “all the power and money in the world” in general, and it would certainly apply to the silver and gold inventories that are left on the COMEX. I’m sure Reg will excuse me if I paraphrase a little… “When the central banks realize that too many are not just wise to their scam but also are taking advantage of it; that the gold (and silver) con artists themselves have become the marks, the greatest bank run in history will shift into high gear. It will be a run not just from dollars or even from paper currency in general, but from modern central banking itself, as the lenders of last resort succumb to the resurrected worldwide preference for the financial asset(s) of last resort.” You can just substitute the word NYMEX/COMEX for the word “central bank”, and you’ll have an idea of what’s coming your way, as the run on COMEX silver stocks has already begun…and COMEX gold bullion inventories won’t be far behind. The boys at the COMEX certainly don’t have much left in the registered silver category, do they…and that amount is getting smaller and smaller as the months and years tick by. Dr. Gorham, the only thing that you can thank God for, is that the silver (and gold) industry isn’t coming after you with all guns blazing. If they did…and since the CFTC is the government regulator…you could possibly be liable for dereliction of duty and malfeasance…for violating your oath of office. The boys over at the COMEX (being a private corporation) could be held personally liable. That’s just my opinion, as I’m not a lawyer. But it’s a pretty good bet that nowhere in your oath of office (or job description) at the CFTC (and the same would apply to the boys over at the COMEX) do the rules even hint at allowing the ‘8 or less traders’ to be short seven (7) years worth of U.S. silver production…as they are now. Quite frankly, the reason that the silver industry (and gold) hasn’t been scaling the ramparts at the CFTC and the COMEX has mystified me (and countless others) for many years. I have some comments about that, and I hope you don’t mind if I share them with you. Some of the gold companies (I bless them one and all, for we know who they are) have taken up the struggle through a group known as The Gold Anti-Trust Action Committee, an organization formed to expose the rigging of the gold price by The United States Treasury, Exchange Stabilization Fund, the Federal Reserve, the central banks of the world, and various and sundry bullion banks such as Goldman Sachs and JPMorgan and their ilk. In private the people at most of the gold companies I’ve talked to over the years, know what’s going on…but in public…few of them will say anything. But as far as primary and secondary silver producers doing anything about their own plight (and the corresponding plight of their shareholders), the silence from this group has been deafening. More about them later, as I wish to mention another organization first before I get back to the mining companies. There is a group called The Silver Users Association with which you are more than familiar I’m sure. If not, you should be, as virtually all of them are sitting on one CFTC advisory committee or another. I’d be prepared to bet that you didn’t get nominated to your current position without their approval. They may have even hand picked you for the job. Who knows, maybe you were one of ‘the powers that be’ to start with. Normally I would refer you to their website at www.silverusersassociation.org but for some reason its original contents have suddenly disappeared. If you wish to call them at their head office in Washington to get a copy of their “Mission Statement,” their number is 1-202-785-3050, but I’m sure you already know it by heart. My bet would be that since their web site now just contains an e-mail address; they may have already changed the most incriminating part of their mission statement regarding ‘excessive speculation.” More on that below. Ted Butler wrote an essay about the Silver Users Association called “Silver Users, Silver Abusers” which I have also enclosed, so I will not add to his comments. But I will quote part of two paragraphs from his essay to bring you up to speed on the general gist of it, and I have highlighted some of the more salient parts... “Now let me give you my description of the Silver Users Association. I’m not about to beat around the bush. The SUA is a dubious, manipulative organization, whose sole purpose is to artificially depress the price of silver.” Further down in this essay, Ted has this to say… “On any silver price rise, the SUA will be all over the Commodity Futures Trading Commission (CFTC), to pressure the COMEX to curb the "excessive speculation". According to the Silver Users Association, silver only rises due to "excessive speculation", and never because of legitimate market fundamentals. Where will the SUA’s attention be focused? At the only place it can be focused – on the paper traders on the COMEX - or, more correctly, on the paper traders holding long positions. They are always the culprits. Even though we are at the lowest inflation adjusted price for silver in 5,000 years, the SUA will look to assign blame for any price increase on paper silver investors. Trust me - you can take this one to the bank.” Dr. Gorham, this essay is three years old, but still applies today. Another essay written about the Silver Users Association is called “The Silver Raiders.” The author is Charles Savoie. This is a very small part of what he had to say… “I don’t know what you could compare them to in any other commodity, because this is the only users group in any commodity. If anyone can show why they are not an illegal short-side price fixing cartel in violation of antitrust law, regular readers of this website would like to see it. That would be like proving the great white shark isn’t a marine predator.” Normally I would send this essay along as an enclosure, but it is so huge that I’m just going to give the URL and you can type it into the address bar on your computer. The URL is: www.silver-investor.com/raiders.htm Now back to the issue of the silver producers themselves. As you can imagine, because of the supply/demand numbers for silver and gold, and the suppression of the price facilitated by yourself and others, I’m heavily invested in silver (and gold) shares of many companies, just waiting for you guys to fold up your tents. I (and other shareholders) have spoken to many of the top executives of several of the large silver companies based here in Canada and the United States about this issue, and they absolutely refuse to deal with it. In private (and some not so private) communications with these companies, either in person, by phone or by e-mail…I have been basically told that they are prepared to do little or nothing on this issue and have told me (and others) to “go forth and multiply”, which in the vernacular of New York City means ‘f--k off.’ Privately, many of their employees tell me that they all know what’s happening, but are powerless to do anything about it themselves. Five years ago, before I got involved in the gold and silver market, it would never have dawned on me that a company and its board of directors would not (at all times and all issues) be working in the best interests of their own industry or their own shareholders. By their very silence they seem to have made a policy statement on this issue. This includes their own producer organization to which they all belong…The Silver Institute…based in Washington, D.C. I’ve been led to understand that, at times, the SUA and the SI have been known to work together on certain projects. With their respective head offices in the same city, it sure does make it convenient…doesn’t it? In all fairness to most of these silver companies, they are improving shareholder value in other areas of their operations (as per their glossy reports), but the rigging of the silver price on the COMEX by ‘8 or less traders’…and a net short position of almost one billion ounces…well, they ain’t interested in talking about it let alone doing much about it…even though they say that they are out there every day increasing ‘shareholder value.’ But the question begs to be asked: What happened to the fiduciary duties of the Executive and Board of Directors of these silver companies (on this particular issue) to the individuals who really own the company…us, the shareholders? Just asking. So it’s up to us…the little guy…the shareholders from around the world, via the Internet, to launch this tirade against the forces of the The Empire. To tell you the truth Dr. Gorham, I don’t look like Luke Skywalker and I bet you don’t look like Darth Vader or the Emperor. We’re just a couple of past middle age guys who are trying to go along to get along. But somewhere along the way you appear to have been consumed by “the dark side of the force”; and like Alan Greenspan, tossed out your scruples and business ethics and joined The Empire. However I, and many other members of the Rebellion, are fighting for what’s right…and all the good things that America was…and can be again…if people such as you (and the organization you represent) didn’t exist. But since the CFTC does exist, and you have one of the top jobs there, it would be really wonderful if you would enforce the rules. How about some realistic position limits in silver…or preventing the ‘8 or less traders’ from naked short selling all the paper silver necessary to control the price. It’s my belief that you, and the people you work for, and work for you, represent something far more sinister…but that is beyond the scope of this letter. The silver companies may have left us stockholders twisting in the winds so to speak, but we will fight on regardless…no matter how powerful the forces that are apparently aligned against us. I just wanted to write this letter to put you (and all the others that are cc’d at the bottom) on formal notice that your blatant protection of those who have been rigging the price of silver for the last fifteen odd years is now conspicuously obvious to the entire silver investing public, the silver miners…both primary and secondary producers…and most importantly, the mostly third world countries whose economies have been devastated for decades by this unbelievable corruption of free market forces. We both know that if the prices of the two monetary metals are kept in check, then all commodity prices are kept in check. Basically the ‘powers that be’ in the United States have been stripping the commodity producers of the world (including your country and mine) of their resources at prices far below their intrinsic value…for the benefit of themselves. Plus they want to protect the beloved ‘reserve status’ of the almighty U.S. dollar…and the present fiat currency system. I know that this letter probably won’t do much good Dr. Gorham, but I feel better now that I’ve written it. I started this letter Friday evening in an alcoholic haze, and am finishing it late Saturday afternoon. Now I’ve got to get changed. My wife and I are off to the symphony. Brahms Piano Concerto #2 in D minor…and Camille Saint-Saens Symphony #3 for Pipe Organ are on the menu. It should be a good one. Anyway, I hope you had a pleasant weekend as well. Dr. Gorham, when you get this letter…and if you do have the courage to do something to clean up this mess…please be kind enough to do yourself (and the entire world) a favour and bring this grotesque silver price manipulation to an end. If you don’t…then it’s only a question of who gets to you first: Eliot Spitzer or the ‘Economics 101’ law of supply and demand. It’s your move. Yours very truly, Ed Steer Edmonton,
Alberta emhs/mtf enclosures: cc:
Alan.Sobba
James
Newsome
Vincent
Viola
Michael Steinhause Christopher
Bowen Thomas
LaSala, VP File (2) 19 February 2004 The Honorable Eliot
Spitzer Registered Mail and e-mail Subject: The Silver Market Dear Mr. Spitzer: This letter is a follow-up to my letter to you on February 4th regarding the manipulation of the silver market by the ‘8 or less traders’ at the NYMEX/COMEX. Enclosed is a copy of a letter dated 13 February 2004 that I wrote to Dr. Michael Gorham over at the CFTC. Also enclosed is a copy of a new essay about the nefarious goings on at the NYMEX and the “Crimex.” It is dated February 17th and entitled “Targeting the Gold Cabal with Silver Bullets.” The author, Harvard educated lawyer Reginald Howe, is one of the most well know and respected spokespersons on the manipulation of the gold (and silver) markets. You can view this essay at his website: http://www.goldensextant.com/. The essay itself is right on the home page. My third enclosure is the latest essay from world renown silver expert; Theodore (Ted) Butler dated February 16th. The essay is entitled “Keeping the Pressure On.” In it, he lays out how very simple it would be for the NYMEX/COMEX to ensure that there is a level playing field…not only for silver (and gold)…but for all other commodities as well. His website for this essay is at: http://www.butlerresearch.com/archive_free.html In a very related note, I see that Jeff Skillings just got indicted today. Enron is gone…it’s past employees and some of their largest shareholders lives are in ruins. Mr. Spitzer…there is a crime in progress at the NYMEX/COMEX that the CFTC absolutely refuses to do anything about. It’s my opinion (as stated in my attached letter to Dr. Gorham) that the CFTC is complicit. The implications of this grotesque and malignant cancer at ground zero of the United States commodities market are beyond belief…and the ramifications of this manipulation of free market forces, once exposed, will reverberate at the highest levels of finance, economics and geo-politics. Mr. Spitzer…I, and thousands of others, beg you to do what is right and end it. Yours very truly,
Edward Steer emhs/mtf enclosures
(3): Letter to Dr. Michael Gorham (CFTC)
– seven (7) pages File (2) |
